Boolean modifier in game engine
In 2.71 the boolean modifier works in the game engine.
The limitations are that the modifier is static, the way the booleaned object looks at the start of the game is how it is going to stay. You can for example rotate the base object (the object with the boolean modifer) and it will rotate properly, with all booleaned intersection moving properly. However if one of the target objects (objects used as the object to target in the modifier) is moved, it will not change the mesh at all.

If both objects are showing, it may be that both objects are in the game. Move the target objects to a different layer that is not in the game.